1. Field of the Invention
The present invention relates generally to processes for ensuring an importer's compliance with domestic customs requirements. More specifically, the invention relates to systems and methods for correcting erroneous information reported to customs agents, as well as the effects of such erroneous reports, after the imported goods to which the reported information refer are received by the importer.
2. Description of Related Art
When a company imports goods from foreign sources, the company is subject to numerous U.S. Customs regulations. One set of requirements is based upon a complex classification system created by U.S. Customs, known as the Harmonized Tariff Schedule (HTS) code. Within this system, U.S. Customs classifies types of products using 10-digit HTS codes. These codes are used, for example, in determining the applicable tariff rates on different types of products imported into the U.S. An company importing goods must correctly classify imported products under the HTS code. This task is especially difficult for companies that import a large variety of products, such as automobile parts, because of numerous complexities in the classification system.
Large importers of foreign goods often employ customs brokers to serve as agents between the importer and U.S. Customs. Brokers fulfill a number of duties related to ensuring the importer's compliance with customs rules, including gathering and delivering information regarding imported goods to customs agents. One such duty is classification of goods under the HTS code. A customs broker working for the importer traditionally classifies imported products by assigning what he decides are the appropriate HTS Codes. The broker also assigns what are known as “attribute classifications,” meaning classifications of other relevant attributes, such as classifications relating to NAFTA Certificates, anti-dumping and Department of Transportation specifications. In addition, a large number of parties may be involved in the importation process. For example, the importer may be working with a large number of foreign manufacturers or suppliers. Each imported item, from every manufacturer and every supplier, must be accounted for within the HTS classification system. In the case of an imported automobile, whose parts may originate from a variety of different overseas sources, vendors and suppliers, providing HTS classification for each part and each component is a daunting and difficult task, with many inherent complexities.
Once assigned, the customs broker reports classifications to U.S. Customs and pays duties on behalf of the company based on the reported classifications. Unfortunately, the information reported to U.S. Customs by the customs broker sometimes fails to conform to the actual facts surrounding the goods imported. For example, a broker may not be able to discern precisely how many parts are contained in a carton, or may be unable to accurately classify certain automobile parts that do not clearly fall within one of the Customs-defined HTS codes. For example, an automobile typically includes a transmission system which, in turn, includes a variety of individual components. Each of these components may need to be assigned an HTS code when the transmission system is imported. Assigning and tracking individual HTS codes manually is an extremely complicated and difficult task, particularly for major corporations involved in significant import or export activity. Also, classification codes assigned by a corporation, which a broker may then use to classify imported goods, may be initially incorrect in the corporation's records. This may occur, for example, because of subsequent information received from third parties relating to a particular part. Information obtained from various entities within the importation process, recent U.S. Customs Rulings, and the like may bear on whether initial classifications established by corporate analysts were correct in the first instance or have been modified subsequent to their establishment. Because of these and other complexities in the classification process, such subsequent information often gets lost or overlooked.
Moreover, complications can be inherent to the import process itself. At least four distinct phases of operation may exist as part of this process—namely, (i) a pre-entry or classification process, (ii) an entry process, (iii) a post-entry process (including audits and payment balancing), and (iv) an amendment process. Each such phase often includes a complicated set of procedures, many of which are dependent upon or interrelated to other procedures. The phases also usually include a complex set of data concerning importation procedures, which data may contain many other relevant dependencies and interrelationships. These procedures and interrelationships must often be integrated and managed in a meaningful way so as to ensure full compliance with U.S. import regulations.
Managing and communicating necessary information to and from an importer and a customs broker can also be important. Customs brokers may be appointed by the importer to prepare the necessary paperwork for a given shipment or set of shipments, such as a U.S. Customs 7501 form, a commercial invoice, and a shipment manifest and to present those forms to U.S. Customs when the goods are imported into the country. Customs brokers may also tender tariff payments to U.S. Customs, and are subsequently reimbursed by the importer.
Because of the difficulties described above, and other complexities involved in the importation and classification process, mistakes in reporting classification data to Customs are often made. Such mistakes may be particularly likely to be made by Customs brokers acting as intermediaries between a major corporation and U.S. Customs. When erroneous data is provided to U.S. Customs by the customs broker, the corporation pays erroneous duty amounts as a result. Thus, not only are there requirements for classification and reporting of imported goods, but there are additional requirements for auditing such reports and for correcting detected errors and generating amendment reports in the event that corrections are made. There is not currently a thorough, convenient or efficient way to ensure from a central location that goods imported by multiple divisions of a single company are accurately classified and reported to U.S. customs, that customs brokers submit accurate information for the calculation of duties, that improperly paid duties or other data errors may be detected and corrected, and that other portions of an overall customs compliance process are effectively conducted and managed.